On The Fly: Top stock stories at midday
Stocks have mostly drifted since the open and the major averages are little changed near noon. Earnings season got off to a quick start with three Dow components reporting this morning and all of them beat Wall Street estimates. The post-earnings strength in UnitedHealth (UNH) and Johnson & Johnson (JNJ) have helped the Dow surpass 23,000 for the first time in its history, though the blue chip index has slid back under that round-number milestone after crossing above it briefly. ECONOMIC EVENTS: In the U.S., industrial production rose 0.3% in September, with capacity at 76.0%. The NAHB housing market index bounced 4 points to a reading of 68. The trade price report beat estimates with big September headline gains of 0.7% for imports and 0.8% for exports. In Europe, the final Eurozone CPI figures for September were inline with the flash readings while Germany's ZEW current situation and expectations readings came in a bit short of expectations. COMPANY NEWS: Shares of Netflix (NFLX) have declined 2% in early trading after the company's addition of 5.3M subscribers in Q3 topped consensus expectations and its guidance for Q4 also came in slightly above forecasts. However, the stock's strength heading into the earnings report and recent bullish analyst notes indicate that expectations were already elevated... Three Dow members reported this morning, with UnitedHealth the clear winner, rising 5% after its "beat and raise" report. Johnson & Johnson, which also raised its guidance, is up over 2% while Goldman Sachs (GS) is down over 1.5% despite posting earnings and revenues that topped the consensus forecast... In addition to Goldman, big bank peer Morgan Stanley (MS) reported this morning and also posted better than expected top and bottom-line results. Unlike Goldman, the stock has advanced fractionally following the report. MAJOR MOVERS: Among the notable gainers was Harley-Davidson (HOG), rising 2.5% after reporting Q3 earnings. Also higher was Ionis Pharmaceuticals (IONS), which is up 4% after Morgan Stanley said its survey predicts U.S sales of the spinal muscular atrophy drug Spinraza that are 10%-25% ahead of the consensus forecast. Freeport McMoran (FCX) was among the noteworthy losers, sliding 3% after Deutsche Bank analyst Chris Terry downgraded the stock to Sell citing an unfavorable risk/reward profile due to valuation and continued uncertainty at its Grasberg mine. Also lower was Impax (IPXL), which is down 10% after the company announced an agreement for a business combination in an all-stock transaction with Amneal Pharmaceuticals. INDEXES: Near midday, the Dow was up 23.20, or 0.1%, to 22,980.16, the Nasdaq was down 2.75, or 0.04%, to 6,621.26, and the S&P 500 was down 1.42, or 0.06%, to 2,556.22.